7 Avoidable Mistakes You're Making in Your Business Loan Application

Jared Hecht
, ContributorI write about small business lending, finance, and entrepreneurship.Opinions expressed by Forbes Contributors are their own.

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As with almost every aspect of our lives these days, the internet has made it easier, faster, and more convenient than ever for small business owners to gain access to financing, submit business loan applications, and get cash in hand to pursue their goals.

Even so, when it comes to something as important as financing your small business, the easy, fast, convenient way won't necessarily give you the best results.

Each and every day, we see small business owners facing a denied business loan application or winding up with less than optimal interest rates or terms because they submitted business loan application without adequate research and preparation.

Before you submit your business loan application, make sure you're not falling prey to one of these seven all too common (and totally avoidable) mistakes:

You haven’t checked your credit.

Did you know that even when you're applying for a business loan, your personal credit score as the business owner may be the single most important factor determining whether your funding is approved?

If your average credit report is over 700, you can consider yourself in great shape to be eligible for a business loan. However, a score that is under 600 or even under 650 will cut your chances of approval, as well as the interest rates you receive.

That's why before applying for any business loan, you should be monitoring your credit with all three of the major reporting agencies: Experian, Equifax, and TransUnion. You should know what your credit score is, what's on your credit report, and be checking for any mistakes or misreporting on any of the reports.

If you do encounter an error on your credit report, make sure to reach out to the credit reporting agency in writing as soon as possible, as the process of correcting mistakes can be a long one.

You didn’t write a business plan.

What does your business do? How is it going to make money? What is your marketing strategy? What kind of personnel will you need? What are your revenue projections?

These are questions you may have already answered in your head—but if you don't put them in writing, your lender has no way of knowing what your intentions are for your business, whether your plan is well thought out, or how high your chances are of being successful.